Calls

California’s governor weighed in more forcefully last week inthe continuing summer electricity rate shock plaguing the southernend of the state and calling into question the future of thestate’s four-year electric industry restructuring. A virtual flurryof state activity is expected this week at four different stateagencies and at the state legislature, which returns from a summerrecess.

One of California’s two newest energy regulators Tuesdayadvocated that the state re-regulate parts of its restructuredelectric industry and re-establish some power he said it has cededin the process to the federal government. The plea was part of apress conference in San Diego designed to assuage concernedelectricity customers whose bills have doubled and tripled due to asummer peak-load price and supply crunch.

Shareholders of Anadarko Petroleum and Union Pacific Resourcesvoted to approve a $5.4 billion merger of the two companiesyesterday. The merger calls for UPR shareholders to receive 0.455shares of Anadarko common stock for each of their UPR shares.Anadarko shareholders also voted to increase the size of the company’sboard to 15 members from nine. The combined company will be namedAnadarko Petroleum (see Daily GPI, April4).

President Clinton’s decision yesterday ordering the Departmentof Energy to trade crude oil from the Strategic Petroleum Reservefor two million barrels of heating oil stored in the Northeast asprotection against fuel shortages this winter may not be enough tocalm down Sen. Charles E. Schumer (D-NY).

The finger-pointing and calls for market intervention — mostnotably centered on electricity price caps —heated up fasterthan the temperatures on both coasts this week, with merchantgenerators and incumbent regulated utilities drawing the ire ofstate and federal policymakers.

The finger-pointing and calls for market intervention — mostnotably centered on electricity price caps — heated up fasterthan the temperatures on both coasts this week, with merchantgenerators and incumbent regulated utilities drawing the ire ofstate and federal policymakers.

Unable to end a stalemate over two key issues, Republican andDemocrat leaders of the Senate Energy and Natural ResourcesCommittee sent up a white flag yesterday conceding defeat in theirstruggle to pass comprehensive electricity restructuringlegislation this year. But to show that their efforts weren’tentirely in vain, they voted out a stripped-down reliability bill,which supporters say will provide relief to the bulk power marketas early as this summer.

The calls for FERC to make changes to Order 497’s pipelineaffiliate abuse regulations got louder late last week, as Dynegyand Amoco filed some suggested remedies in response to the resultsof an April technical conference on four negotiated parking andlending (PAL) agreements between Koch Gateway and its affiliateKoch Energy Trading (KET).

New York State Electric and Gas (NYSEG) told FERC yesterday thesituation has reached a critical stage at the New York IndependentSystem Operator, where start-up problems continue to threaten theretail electricity markets. It has called on the Commission toinvestigate and initiate emergency actions to correct continuingproblems at the ISO.